Is It Worth It to Insure Your iWhatever?

Portable electronics—tablets and laptops—aren’t exactly cheap, so it can be tempting to splurge for the added insurance just in case it breaks. But a recent study suggests (much like a lot of other extended warranties) that tablet insurance is a risky investment.

Consumer Reports finds that about one in five tablet owners has a service contract or extended warranty for their device, with roughly 60% opting to get an insurance plan to protect against damage.

It’s a tough decision to make if you already have a smartphone and laptop. Insurance isn’t cheap, and can add a pretty hefty surcharge to an already expensive device. But if you’ve already cashed out on a new tablet, the last thing you want is to be caught out there without some protection.

Well, the good news is that it turns out only four percent of tablet owners ever have their devices repaired, putting into serious question whether it’s worth it to spring for insurance. However, if you think you’re a part of the unlucky minority that will break, damage or flat out run down your device, here’s some advice on making sure it’s covered.

Evaluate Your Risks

Before considering purchasing insurance, assess your own risk. Tablet devices, with their large glass screens and slender designs, are fragile tools. If you’re accident prone, you could be among the minority of users that will need coverage. Consider how many times you’ve had your cell phone or laptop repaired or replaced. Do you have bad habits like falling asleep with your electronics in bed, for example? Do you travel often and likely to carry your device where spills and drops are highly probable? Insurance then might be a major financial relief, especially when it’s been found that repairing some gadgets can cost from 50% to 100% of their initial purchase price.

Read the Fine Print

While many products come with an automatic 12-month manufacturer’s warranty, they may only cover a manufacturer defect, not damage. That means if something goes wrong with your device, common issues like water damage or breaks from a fall won’t be considered legit claims. Read the fine print on any warranties, and don’t be afraid to ask a salesperson about what’s covered when you make your purchase.

Comparison Shop

The most popular tablet, Apple’s iPad (of course), costs between $299 and $929. It’s a nice chuck of change that could go down the drain with major damage. So how much is a little peace of mind worth to you? Consumer Reports found the median price paid for Apple’s extended plans is $82. For non-iPad tablets, the median price is $61.

AppleCare also has a $49 per-incident charge. So in all, with insurance you could end up paying more than a quarter of the device’s total cost just to have it fixed. For those looking for the best deal on protection, the magazine recommends Wal-Mart’s Product Care Plans. You may not know, but the big-box retailer covers all types of tablets and e-readers at affordable prices. The iPad plan, for example, costs nearly half of the AppleCare price for a two-year service plan.

Finally, with the tablet market rapidly evolving and better, faster, cheaper models emerging each year, it may be more financially fit to just upgrade to a different—or newer—version of what you have in the event that it goes bust. Think about it: you’ll likely get some sort of coverage from the manufacturer for a certain period of time (for free). Beyond that, if you don’t have insurance and your tablet breaks or needs repair, the cost to do so may not be worth it… especially if there’s a hot new item that costs just a little more or even less.

Donovan X. Ramsey is not a personal finance expert. He’s a multimedia journalist who writes about all things social, political, cultural and whimsical. After college, Donovan set out to discover everything he didn’t know about the world of personal finance. Learn along with him weekly on EBONY.com as he explores more everyday money matters. Follow Donovan on Twitter @iDXR or at DonovanXRamsey.com.

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